City refunds sweepstakes fees

Friday

Sep 13, 2013 at 12:01 AMSep 13, 2013 at 2:47 PM

Dan Arthurs didn’t think he was taking a gamble when he decided to install Internet sweepstakes machines in his business last year. The machines were popping up across the state. Owner of Cherryville Golf and Country Club, Arthurs said he wanted to please his customers. He paid local licensing fees and purchased three machines.

Diane Turbyfill

Dan Arthurs didn’t think he was taking a gamble when he decided to install Internet sweepstakes machines in his business last year. The machines were popping up across the state. Owner of Cherryville Golf and Country Club, Arthurs said he wanted to please his customers. He paid local licensing fees and purchased three machines.

A week later, a N.C. Supreme Court decision made the video gaming machines illegal. Before any dust had collected on Arthurs’ machines, he unplugged and sold them. Arthurs said he sold the machines to someone from Lincolnton, taking a slight loss in the deal. But Arthurs said he also took a hit from the city.

He had paid nearly $6,000 to Cherryville — $2,500 for a business license and a $2,500 fee per machine. Because he’d only had the machines running a week, Arthurs felt entitled to his money back. He attempted to get a refund from the city by sending two letters. When he was ignored, he filed a civil lawsuit.

Arthurs filed the lawsuit in April. At a city council meeting the next month, Councilman Brian Dalton announced the city would refund fees to all businesses that licensed sweepstakes machines. The refunds would total $21,000, Dalton said during the meeting.

City leaders figured it was a bargain, estimating that fighting one lawsuit could cost $12,000. Cherryville City Manager Ben Blackburn estimated five businesses have received refunds. Cherryville Mayor Bob Austell said during the May meeting the $21,000 the city collected in sweepstakes fees had not been included in the budget and had not been spent.

Douglas Arthurs said he’s only handled the one lawsuit regarding sweepstakes machines. But he thinks all business owners who paid sweepstakes licensing fees should demand a refund.

“I feel like we were right and I feel like all the counties and towns that approved them should give them a refund,” he said. “They sold them the authority to do something then told them you can’t do it.”